The oracle or the crowd? Experts versus the stock market in forecasting ceasefire success in the Levant

Datos Bibliográficos

ID3917271
AutoresGerald Schneider (0000-0002-0091-6217, University of Konstanz, autor de correspondencia), Maya Hadar (0000-0003-0844-4645, University of Konstanz), Naomi Bosler (University of Konstanz)
Año2017
Volumen54
Número2
Páginas231-242
Fecha de publicación2017-03-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaJournal of Peace Research (JOURNAL)
Identificadores de la revistaISSN: 0022-3433 • E-ISSN: 1460-3578
EditorialSAGE Publications Inc (PUBLISHER)
DOI10.1177/0022343316683437
OpenAlexW2275792756
IdiomaEN
Citas recibidas7
Referencias citadas59

The forecasting literature has come to mistrust the predictions made by experts who forecast political events in mass media. Distinguishing between judgements made by one or few individuals ('oracles') and assessments made by larger groups ('crowds'), we contrast journalistic predictions with forecasts stemming from the financial industry. These two competing views were evaluated in a quantitative analysis of the ex ante success of 24 ceasefire agreements in various conflicts which took place in the Levant from 1993 to 2014. Our analysis compares the forecasts appearing in press commentaries ( Haaretz, Jerusalem Post and New York Times) with the expectations that the Tel Aviv Stock Exchange had about the stability of these cooperative efforts. To evaluate the predictions of these very dissimilar sources, the effectiveness of the ceasefires was analysed through the number of violent events following the official start of the truce. The analysis shows that the financial industry performs better than the media industry in the comparative evaluation of ceasefire forecasts, but that neither source provides sufficiently accurate predictions. The partial support for the crowd thesis is discussed in light of recent literature that resuscitates the usage of well-trained experts for forecasting purposes, but warns against the dramatizing predictions of media pundits

Computer security · Crowds · Economics · Financial economics · Operations research · Oracle · Political science · Politics · Salient · Stock (firearms) · Stock market · Computer Science · Economic Sanctions and International Relations · Engineering · History · Law · Market Dynamics and Volatility · Political Conflict and Governance